Subsequent Event

3 Months Ended

Mar. 31, 2020

The COVID-19 outbreak has adversely impacted economic activity and conditions worldwide, including workforces, liquidity, capital markets, consumer behavior, supply chains, and macroeconomic conditions. After the declaration of a national emergency in the United States on March 13, 2020, Governors in most states in which the Company operates have instituted stay-at-home policies that remain in place. In response to COVID-19, the U.S. Government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") on March 27, 2020.

At March 31, 2020, management was aware that under the CARES Act, the following portions of the CARES Act would provide additional cash to the Company; however, the terms and conditions of each were not know until April 2020.

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$100 billion Provider Relief Fund. Provides funds to health care providers who provide or provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19, with payments to be used to prevent, prepare for, and respond to COVID-19, and shall reimburse us for health care related expense or lost revenues attributable to COVID-19. As of May 5, 2020, the Company received $87.5 million of the Provider Relief Fund.


•	CMS's Accelerated and Advance Payments Program ("AAPP"). Provides financial hardship relief to Medicare providers impacted by the COVID-19 pandemic in order to provide necessary funds when there is a disruption in claims submission and/or claims processing. As of May 5, 2020, the Company received $307.6 million of accelerated and advance payments.


•	Suspension of the 2% sequestration payment adjustment. CMS suspended the 2% sequestration on patient claims with dates of services from May 1 through December 31, 2020 to provide for additional funding to providers.


•	Waiver of the application of site-neutral payment. Under Section 1886(m)(6)(A)(i) of the Act for LTACH admissions that are completed in response to the public health emergency ("PHE") and occur during the COVID-19 PHE period,

the claims processing systems will be updated to pay all LTACH cases admitted during the COVID-19 PHE period at the LTACH PPS standard federal rate, effective for claims with an admission date occurring on or after January 27, 2020 through the end of the PHE period.


•	Delayed payment of employer portion of social security tax. Provides relief for companies from paying for the 2020 employer portion of social security tax with 50% of the payments delayed to be paid by December 31, 2021 and the second 50% to be paid by December 31, 2022.

The Company anticipates that all AAPP funds received by the Company will begin to become due 120 days after the Company's receipt of such funds. Thereafter, the AAPP funds that the Company received will be automatically recouped from amounts otherwise payable to the Company, until all such funds have been completely repaid. Additionally, the funds the Company received by the Provider Relief Fund could be potentially subject to repayment if those funds are not fully utilized to address the lost revenues and/or increased costs associated with the Company's direct efforts associated with COVID-19.

Management concluded that the above portions of the CARES Act that directly impact the Company were a Type II subsequent event under ASC 855 and will be accounted for during the three months ended June 30, 2020, as the terms and conditions of such payments were not known at March 31, 2020.